WSJ: Startups – How to Prepare for Crowdfunding

Good tips for all ye crowdfunders – great way to start up a new business!

WSJ: A successful campaign takes plenty of advance planning—as well as constant involvement along the way—to keep backers happy and new supporters joining on. A halfhearted effort could not only make a cash drive stall out, it also could do lasting damage to an entrepreneur’s standing with customers and potential investors down the road.

Here’s some advice from pros and entrepreneurs who have made the process work.

Form a Company

As you plunge into fundraising, it’s smart to make sure that you protect yourself by creating a formal business entity, such as a limited-liability company. With a structure like an LLC in place, anyone who sues you can only receive assets from your LLC, not from your personal wealth, says Tom Murphy, senior partner at McDermott Will & Emery LLP in Chicago.